Due to favorable tax adjustments in 2017 related to U.S. tax reform, fourth quarter income from continuing operations decreased 76% to $106 million and diluted EPS from continuing operations decreased 75% to $1.10

Further adjusted EBITDA1 increased 3% to $240 million in the fourth quarter

Further adjusted diluted EPS1 for the quarter increased 14% to $1.27

Delivered full year net cash provided by operating activities from continuing operations of $292 million and further adjusted free cash flow1 of $580 million

Repurchased 2.6 million shares of common stock for $100 million in the fourth quarter and an additional $40 million through February 25

Full-year 2019 Adjusted EBITDA is projected to be between $995 million and $1,015 million

The Board of Directors authorized a 10% increase in the quarterly dividend to $0.45 per share

Michael D. Brown, president and chief executive officer of Wyndham Destinations, noted, "We are very pleased with our fourth quarter and full-year results. We continue to make progress against our strategic objectives which delivered 6% growth in full-year gross VOI sales and a 240 basis point improvement in our new owner mix, all while preserving margins. Our industry leading margins combined with a capital efficient business model helped generate strong free cash flows and provide strong returns for shareholders."

"As we begin 2019, our priorities remain the same — delivering great vacations and countless memories for our owners and members while providing strong returns for our shareholders. Since the spin-off through today, we have returned $385 million of capital to shareholders in the form of dividends and share repurchases."

Fourth Quarter 2018 — During the fourth quarter of 2018, reported revenues, income from continuing operations and income from continuing operations per diluted share were $956 million, $106 million and $1.10, respectively. This compared to reported revenues of $931 million, income from continuing operations of $444 million and income from continuing operations per diluted share of $4.36 in the fourth quarter of 2017. Total fourth quarter 2018 adjusted EBITDA from continuing operations increased 8% to $241 million, primarily driven by an increase in gross VOI sales and cost savings initiatives.

Full-Year 2018— During the full-year of 2018, reported revenues, income from continuing operations and income from continuing operations per diluted share were $3.9 billion, $266 million and $2.68, respectively. This compared to reported revenues of $3.8 billion, income from continuing operations of $646 million and income from continuing operations per diluted share of $6.22 in 2017. The year-over-year decrease in income from continuing operations was due to a $407 million tax benefit in 2017 due to the U.S. Tax Cuts and Jobs Act. Total full-year 2018 adjusted EBITDA from continuing operations increased 7% to $942 million, primarily driven by an increase in gross VOI sales and cost savings initiatives.

Company Results — Further Adjusted

Further adjusted results are presented as if Wyndham Hotels & Resorts were separated from Wyndham Destinations and the sale of the European rentals business was completed for all periods presented.

During the fourth quarter of 2018, further adjusted net income was $123 million and further adjusted diluted earnings per share (EPS) was $1.27. Further adjusted EBITDA was $240 million, compared to $234 million in the fourth quarter of 2017. The Company's guidance range was $235 million to $243 million.

Full-year 2018 further adjusted net income was $480 million and further adjusted diluted EPS was $4.84. Further adjusted EBITDA was $957 million, compared to $914 million in the full-year of 2017. The Company's guidance range was $952 million to $960 million.

Further adjusted EBITDA increased 2% to $201 million, due to revenue growth of 5% and partially offset by higher product costs in the fourth quarter of 2018, compared to the same period in 2017.

Consumer finance gross receivables grew 5% year-over-year to $3.8 billion. The provision for loan loss as a percentage of gross VOI sales, net of fee-for-service sales, was 19.3% at the end of the fourth quarter of 2018. The provision for loan loss increased to $106 million, with the $5 million year-over-year increase primarily due to higher gross VOI sales volume.

Exchange & Rentals

$ in millions

Q4 2018

Q4 2017

change

FY 2018

FY 2017

change

Revenue

$191

$202

(5)%

$918

$927

(1)%

Adjusted EBITDA

$50

$46

9%

$278

$268

4%

Further Adjusted EBITDA

$50

$46

9%

$278

$268

4%

During the fourth quarter, Exchange & Rentals revenues decreased 5%, primarily due to a 7% decline in exchange revenue per member. The decline in exchange revenue per member was due to lower other product revenue, inventory supply challenges, and negative impacts of member mix, exacerbated by economic headwinds in Latin America.

Net Debt — As of December 31, 2018, the Company's leverage ratio was 2.8x, within the Company's target range of 2.25x to 3.0x. The Company had $2.9 billion of corporate debt outstanding, which excluded $2.4 billion of non-recourse debt related to its securitized notes receivable. Additionally, the Company had cash and cash equivalents of $218 million. Refer to Table 9 for definitions of net debt and leverage ratio.

Cash Flow— For the full-year 2018, net cash provided by operating activities from continuing operations was $292 million, compared to $500 million in the prior year. Further adjusted free cash flow from continuing operations was $580 million and $500 million for the same periods, respectively, primarily due to increased securitization activity.

Share Repurchases— During the fourth quarter of 2018, the Company repurchased 2.6 million shares of common stock for $100 million at a weighted average price of $38.73 per share. As of December 31, 2018, the Company had $816 million remaining in its share repurchase authorization. Subsequent to the end of the fourth quarter, the Company repurchased an additional $40 million of shares through February 25.

Dividend— The Company announced a cash dividend of $0.41 per share on November 14, 2018, which was paid on December 28, 2018 to shareholders of record as of December 14, 2018. Subsequent to the end of the fourth quarter, the Company's Board of Directors authorized a 10% increase in the quarterly cash dividend to $0.45 per share, beginning with the dividend that is expected to be declared in the first quarter of 2019.

Securitizations— In October, the Company closed a $350 million Sierra term securitization with a weighted average coupon of 4.02% and an advance rate of 98%. In December, the Company closed a $279 million private transaction with a weighted average coupon of 4.73% and an advance rate of 70%. The December transaction leveraged receivables that are not eligible for the Company's normal public transactions.

Other

Wyndham Vacation Rentals— The Company has decided to explore strategic alternatives for Wyndham Vacation Rentals, North America’s largest professionally managed vacation rental business.

Outlook

The Company is providing its full-year 2019 guidance as follows:

Adjusted EBITDA of $995 million to $1,015 million

Adjusted net income of $493 million to $513 million

Adjusted diluted EPS of $5.15 to $5.35, based on a diluted share count of 96 million, which assumes no future share repurchases

This guidance is presented only on a non-GAAP basis because not all of the information necessary for a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measure is available without unreasonable effort, primarily due to uncertainties relating to the occurrence or amount of these adjustments that may arise in the future. Please refer to Table 8 for further information.

Conference Call Information

Wyndham Destinations will hold a conference call with investors to discuss the Company’s results and outlook today at 8:30 a.m. ET. Participants may listen to a simultaneous webcast of the conference call, which may be accessed through the Company's website at investor.wyndhamdestinations.com, or by dialing 877-876-9173, passcode WYND, 10 minutes before the scheduled start time. For those unable to listen to the live broadcast, an archive of the webcast will be available on the Company's website for 90 days beginning at 12:00 p.m. ET today. Additionally, a telephone replay will be available for five days beginning at 12:00 p.m. ET today at 800-695-0671.

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures such as adjusted EBITDA and free cash flow, which include or exclude certain items. The Company utilizes non-GAAP measures, defined in Table 9, on a regular basis to assess performance of its reportable segments and allocate resources. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company’s ongoing operating performance by adjusting for items which in our view do not necessarily reflect ongoing performance. Management also internally uses these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. Exclusion of items in the Company’s non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. The Company is also presenting non-GAAP results on a further adjusted basis as if the spin-off of its hotel business and the sale of its European vacation rentals business had occurred for all periods presented. Full reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures for the reported periods appear in the financial tables section of the press release. See definitions at the end of this press release for an explanation of our non-GAAP measures.

About Wyndham Destinations

Wyndham Destinations (NYSE:WYND) believes in putting the world on vacation. As the world’s largest vacation ownership and exchange company, Wyndham Destinations offers everyday travelers the opportunity to own, exchange or rent their vacation experience while enjoying the quality, flexibility and value that Wyndham delivers. The company’s global presence in approximately 110 countries means more vacation choices for its more than four million members and owner families: Wyndham’s more than 220 vacation club resorts, which offer a contemporary take on the timeshare model, with signature brands including CLUB WYNDHAM®, WorldMark® by Wyndham, Margaritaville Vacation Club® by Wyndham, and Shell Vacations Club; 4,300+ affiliated resorts through RCI, the world’s leader in vacation exchange; and over 9,000 rental properties from coast to coast through Wyndham Vacation Rentals, North America’s largest professionally managed vacation rental business. Year-after-year, a worldwide team of more than 24,000 associates delivers exceptional vacation experiences to families around the globe as they make memories to last a lifetime. At Wyndham Destinations, our world is your destination. Learn more at wyndhamdestinations.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include those that convey management's expectations as to the future based on plans, estimates and projections at the time Wyndham Destinations makes the statements and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "intend," "goal," "future," "outlook," "guidance," "target," "projection," "estimate" and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Wyndham Destinations to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements contained in this press release include statements related to Wyndham Destinations’ current views and expectations with respect to its future performance and operations (including the statements in the “Outlook” section of this press release). You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include without limitation general economic conditions, the performance of the financial and credit markets, the economic environment for the timeshare industry, the impact of war, terrorist activity or political strife, operating risks associated with the vacation ownership and vacation exchange and rentals businesses, uncertainties related to our ability to realize the anticipated benefits of the spin-off of Wyndham Hotels & Resorts, Inc. or the divestiture of our European vacation rentals business, unanticipated developments related to the impact of the spin-off, the divestiture of our European vacation rentals business and related transactions on our relationships with our customers, suppliers, employees and others with whom we have relationships, unanticipated developments resulting from possible disruption to our operations resulting from the spin-off and the divestiture of our European vacation rentals business, the timing and amount of future dividends and share repurchases, as well as those factors described in our Annual Report on Form 10-K, filed with the SEC on February 26, 2019, Quarterly Report on Form 10-Q, filed with the SEC on August 8, 2018, and subsequently filed periodic filings with the Securities and Exchange Commission. Except as required by law, Wyndham Destinations undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise.

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